IHOP buys Applebees: It's a nearly $2 billion deal that first surfaced several weeks ago - and attracted considerable skepticism on Wall Street because IHOP is a franchise-focused chain while the much-larger Applebees is made up of company owned-and-operated restaurants. It turns out that the Applebees stores will become franchises, a move that will help Glendale-based IHOP pay off debt. Applebee shareholders will get a 4.6 percent premium over the July 13 closing price. From Bloomberg:
Applebee's began seeking a buyer after shareholder Breeden Capital Management LLC nominated four board candidates in December and called the stock's performance a ``disaster.'' The company's stock declined 4.1 percent in the three years through Feb. 12, the day before it said it may sell itself. Darden Restaurants Inc., owner of the Olive Garden and Red Lobster chains, rose 86 percent during that time, while California Pizza Kitchen Inc., with about 200 restaurants, almost doubled.Port deal near?: Shipping lines and terminal operators have offered a new proposal that sweetens salary and pension benefits and could avoid a work stoppage by the 930-member office clerical union Local 63 of the International Longshore and Warehouse Union. That’s a big deal because it would have shut down all port operations (the rest of the ILWU wouldn't cross picket lines). The union then asked for time to study the proposal. (LAT)
Supermarket pact near?: Apparently the three major chains and the United Food and Commercial Workers made pretty good progress over the weekend, and there's talk that a contract might be close at hand. (LAT)
Mattel's solid earnings: The El Segundo-based toymaker was helped in the second quarter by Barbie sales, which had the biggest quarterly jump in four year. An 18 percent increase in international sales led the way. "Mattel has realized there is more they can do to capture incremental sales dollars overseas,'' Bob Goldsborough of Ariel Capital Management told Bloomberg News.
L.A.'s biggest companies: Disney took over the top spot among the area's 200 largest publicly traded companies, topping biotech giant Amgen. Rounding out the top five are Occidental Petroleum, DirecTV Group Inc. and Northrop Grumman Corp. The Business Journal's rankings are based on market capitalization, which overall grew 11 percent to more than half a trillion dollars.
Mirthala's effect on ratings: The numbers for KVEA's evening news skyrocketed right after word of May Antonio Villaraigosa's affair with anchor Mirthala Salinas. All told, 211,000 viewers tuned in, nearly matching the 237,000 watching KMEX-TV. But when the station placed Salinas on a leave of absence, the numbers fell back near their previous levels. By the end of the week, KVEA had an 11 p.m. audience of 87,000, compared with KMEX’s 373,000. (Business Journal)
The economics of Harry Potter: Sure, bookstores will be selling millions of copies of the final Harry Potter book, but very few will be making big money - not with many chains being forced to cut their prices by up to 50 percent. That's little more than what book chains paid the publisher. From the LAT:
The basic strategy for chains such as Barnes & Noble and Borders as well as online sellers is simple: They hope to attract more customers with lower prices. The chains in particular want to build loyalty by holding elaborate release-night parties, just like independent stores do. "Our everyday best-seller list is 30% off, so this lower price is not all that drastic," Brown said. But will the strategy work? Some call it a dangerous gamble, because the so-called halo effect, in which customers come for one book but buy other similar titles as well, has rarely materialized. "Harry Potter is a remarkable phenomenon," Greco said. "But he's a one-hit wonder."